Xceed Company Profile

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Xceed Company Profile
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Forward-Looking And Other Statements

• This presentation contains forward-looking
  statements which reflect managements
  expectations regarding Xceed Mortgage
  Corporations future growth, performance (both
  operational and financial), and business
  prospects and opportunities. Past results do not
  constitute a guarantee of future performance. A
  number of factors could cause actual results,
  performance, or achievements to differ materially
  from the results expressed or implied in these
  materials. Business prospects and opportunities
  considered are based on approximation
  extrapolation of potential market indicators.
  These factors should be considered carefully and
  prospective investors should not place undue
  reliance on any forward looking statements.

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Growth

• Management

• Performance

• Niche

• Innovation

• Risk-Reward

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Brief History

• Established in Canada in 1997 as a subsidiary of
  IMC Mortgage Corporation.
• Current investor group purchased 90 of common
  stock from BMO in April 2002 and recapitalized
  firm with 22.2MM
• IPO of June 2004 raised additional 24.34MM
• Installed new senior management team with
  entrepreneurial culture and disciplined
  management system.
• Implemented innovative funding programs.
• Invigorated existing broker network channel and
  created financial institution referral programs.

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Senior Management Directors

• Ivan Wahl Chairman, CEO Director
• 30 years of experience in the Canadian mortgage
  finance industry.
• Played a leading role in the development of the
  mortgage-backed securitization industry in
  Canada.
• Founded FirstLine Trust Company in 1985, grew and
  sold the business to CIBC in 1995.
• Vice-Chairman and Director of CIBC Mortgages Inc.
  from 1995 to 2001.
• Michael Jones President COO
• Previously Vice President, Commercial Mortgages
  for CIBC Mortgages Inc. where he also oversaw the
  CIBC Access Program.
• Joined FirstLine Trust in 1992.
• John Ayanoglou CFO Corporate Secretary
• Previously the Chief Financial Officer of
  publicly-listed Cartier Partners Financial Group.
• Practiced within Financial Services Group of
  PricewaterhouseCoopers LLP from 1996 to 2000.
• Karen Martin VP, Securitization and Capital
  Markets
• Previously the Treasurer of Amicus Holdings
  (division of CIBC), Director of Balance Sheet
  Management, and General Manager of Securitization
  for CIBC.
• Manager, Financial Analysis and Manager,
  Financial Reporting for FirstLine Trust Co. from
  1988 to 1996.
• Robert C. Krembil, Director

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Shareholders
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Experience

• Breadth and depth of senior management and board.
• Focused channel management.
• Disciplined underwriting and default management.
• Entrepreneurial results-based performance model.
  
• Product innovation and design.
• Knowledge of capital markets and proprietary
  funding programs
• Risk adjusted pricing that ensures returns are
  commensurate with risk.

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Financial Highlights
2005(2)
2001
CAGR
Revenue
1,558M
43,668M
130
Mortgages
126MM
1,554MM
95
Net Income(1)
(1,127)M
17,791M
98
ROAE (3)
(34.8)
21.2
26.9

• The CAGR figure for Net Income is calculated from
  fiscal year 2002 as net income was negative in
  2001.
• Trailing twelve months ended July 31, 2005,
  except for Mortgages.
• The percentage presented is the average ROAE
  calculated from fiscal year 2002 as net income
  was negative in 2001.

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Revenue Growth
CAGR 130
Under Previous Management
Under Current Management
Xceeds fiscal year end is October 31. The 2005
balance represents the trailing twelve months
ended July 31, 2005.
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Mortgage Book Growth
CAGR 95
Under Previous Management after 5 years
Under Current Management
Xceeds fiscal year end is October 31. The 2005
balance presented is as at July 31, 2005.
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Mortgage Fundings Growth
CAGR 69
Xceeds fiscal year end is October 31. The 2005
balance represents the trailing twelve months
ended July 31, 2005.
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Increasing Profitability
Net Income Growth
CAGR 98
Under Previous Management
Under Current Management
Xceeds fiscal year end is October 31. The 2005
balance represents the trailing twelve months
ended July 31, 2005.
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Effective Use of Capital
Return on Equity
Average 20.2
Under Previous Management
Under Current Management
Xceeds fiscal year end is October 31. The 2005
ratio represents the trailing twelve months ended
July 31, 2005.
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Drivers of Growth

• Nascent but rapidly growing Canadian
  non-traditional residential mortgage market.
• Opportunity for product innovation beyond vanilla
  3 year 5 year offerings.
• Distribution
• Established mortgage broker relationships
• Financial Institution channel has only just
  started to grow.
• Low variable cost business model provides
  significant operating leverage.
• Efficient method of raising capital provides
  opportunity for high ROE
• Effective improvements in funding ratios will
  leverage increased volumes.
• Continued leveraging of low cost electronic
  approval / funding system, with single location
  (in Toronto).

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Growth Potential

• Potential size of Canadian non-traditional market
  is estimated at 10 of the total residential
  mortgage financing market (approximately 550
  billion)
• Total outstandings of the non-conforming market
  in Canada are approximately 8 billion
• About 50 billion in untapped potential!!
• This represents 300,000 families living in
  apartments who may meet our underwriting
  requirements and would love to own their own
  homes.

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US Market

• Sub-Prime
• 1 Trillion
• 15 of total mortgage market
• Credit Quality
• Accept poorer credit quality
• Typical Mortgages Structures
• Open (higher prepayments, no penalties)
• Long terms (e.g., 30-year fixed)
• Consumer Protectionism
• In most states, lender must choose between
  foreclosure of property or personal assets, not
  both
• Gain on Sale Accounting
• Volatility of assumptions because of open
  mortgages and 30 year term structure

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Competitive Position
Traditional Lenders (Big 6 Banks)
GMAC / Wells Fargo
XCEED
A B C
Borrower Credit Rating
Home Capital / Equitable Trust
25 50 75 100
Mortgage Loan to Value (LTV) Ratio
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Market Niche

• Focus on non traditional market
• Non Conforming Credit
• High Loan to Value Uninsured
• Origination through two distinct channels
• Mortgage Brokers
• Financial Institutions (referral programs)
• Execute effective and efficient business model
• Concentrate on origination
• Disciplined credit underwriting
• Outsourced servicing
• All new product securitized regularly
• Entrepreneurial culture with structured
  management processes

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Innovation

• Established Funding Methodology
• 62 Million combined warehouse and revolving
  facility
• Securitization of mortgages thru regular
  (non-recourse) sale to Trusts.
• Trust senior notes funded through established
  100 billion dollar asset-backed commercial paper
  market
• Trust credit enhancement provided by third party
  investors and Xceed
• Solid Risk Control
• Interest Risk immunization thru swaps and other
  hedging mechanisms.
• Credit Risk control thru frequent asset quality
  and compliance reviews by DBRS and Trusts
  securitization agent
• First charge, residential mortgages only,
  regionally diversified, in pre-approved locales
• Average mortgage size is 165,000

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Financial Model Pro-Forma Economics(1)

• .

• Analysis is based on approximations of average
  portfolio economics over the life of a
  representative mortgage portfolio.
• (2) Application fees are based on Xceeds
  average product mix.
• Commissions and other expenses includes hedge
  costs, cost of yield buy up on subordinate
  co-owned interest. Volume bonus can reduce profit
  further..
• Approximate mortgage coupon rate based on
  historical average.
• (5) Trusts costs consist of allowance for
  losses, cost of credit enhancement, program fees,
  and MCAP servicing costs.

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Disciplined Underwriting
Reduction in Loss Default Percentages(1)
Mortgage Default CAGR (12)
(2)
Under Previous Management
Under Current Management

• Ratios are a percentage of average securitized
  portfolio under administration.
• Xceeds fiscal year end is October 31. The 2005
  percentages represent the trailing twelve months
  ended July 31, 2005.

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Credit Risk

• Typical Xceed Mortgage

100
92
81
Securitized Portfolio
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Summary

• Limited competition
• Nascent, rapidly growing niche.
• Strong experienced management.
• Capital markets proprietary funding models.
• Performance based culture.
• Focused multi-channel origination.
• Disciplined underwriting.
• Disciplined default management.
• Risk adjusted pricing model.
• Flexible, scalable technology with comprehensive
  relevant reporting capability.

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Questions
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